The “more economic approach” was introduced to antitrust to achieve a more effect-based and theoretically grounded enforcement. However, related to predatory pricing it resulted in systematic over- and under-enforcement: Economic theory does not require dominance for predation to be a rational (and harmful) strategy, although an ex ante dominant firm would often refrain from predation. Hence, within the current legal framework which requires dominance for antitrust to apply, a more effect-based and theoretically grounded antitrust enforcement cannot pursue harmful predation. Therefore, we suggest separating predatory pricing from exclusionary abuse of a dominant firm, both legally and analytically. Instead, predatory pricing should be analyzed along the same logic as a merger. In particular, we argue that three elements from merger control should be adopted: in the absence of dominance, market share and/or turnover thresholds may serve as a de minimis rule; recoupment should be analyzed similar to the competitive effect of a merger between the predator and its prey; and a stronger efficiency defense should be established.
{"title":"THE MORE ECONOMIC APPROACH TO PREDATORY PRICING","authors":"Michael Funk, C. Jaag","doi":"10.1093/JOCLEC/NHY008","DOIUrl":"https://doi.org/10.1093/JOCLEC/NHY008","url":null,"abstract":"The “more economic approach” was introduced to antitrust to achieve a more effect-based and theoretically grounded enforcement. However, related to predatory pricing it resulted in systematic over- and under-enforcement: Economic theory does not require dominance for predation to be a rational (and harmful) strategy, although an ex ante dominant firm would often refrain from predation. Hence, within the current legal framework which requires dominance for antitrust to apply, a more effect-based and theoretically grounded antitrust enforcement cannot pursue harmful predation. Therefore, we suggest separating predatory pricing from exclusionary abuse of a dominant firm, both legally and analytically. Instead, predatory pricing should be analyzed along the same logic as a merger. In particular, we argue that three elements from merger control should be adopted: in the absence of dominance, market share and/or turnover thresholds may serve as a de minimis rule; recoupment should be analyzed similar to the competitive effect of a merger between the predator and its prey; and a stronger efficiency defense should be established.","PeriodicalId":45547,"journal":{"name":"Journal of Competition Law & Economics","volume":" ","pages":""},"PeriodicalIF":1.5,"publicationDate":"2018-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/JOCLEC/NHY008","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43931122","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"UNDERSTANDING GOOGLE’S SEARCH PLATFORM AND THE IMPLICATIONS FOR ANTITRUST ANALYSES","authors":"John M. Yun","doi":"10.1093/joclec/nhy009","DOIUrl":"https://doi.org/10.1093/joclec/nhy009","url":null,"abstract":"","PeriodicalId":45547,"journal":{"name":"Journal of Competition Law & Economics","volume":" ","pages":""},"PeriodicalIF":1.5,"publicationDate":"2018-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/joclec/nhy009","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43069710","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper aims to shed light on the economic tools, as well as the legal-economic reasoning, which are used by different European antitrust authorities to assess the allegedly anticompetitive practices of a platform operating in a two-sided market (2SM). First of all, we show that despite the flourishing literature on 2SM economics, antitrust authorities are still facing major challenges when taking decisions concerning two-sided platforms (2SPs). Secondly, we perform a cross-country, comparative study of recent competition proceedings towards the 2SP Booking.com and highlight conceptual and practical divergences among antitrust authorities which are bound by and applying a common European legislation. By concretely and thoroughly showing where the differences lie, our study contributes to identifying the issues to tackle in order to ensure a better harmonized implementation of measures towards 2SPs at the EU level. Finally, building on the results of our work, we propose some alternative approaches which could benefit future antitrust analyses in 2SMs.
{"title":"ASSESSING ANTICOMPETITIVE PRACTICES IN TWO-SIDED MARKETS: THE BOOKING.COM CASES","authors":"Chiara Caccinelli, J. Toledano","doi":"10.1093/JOCLEC/NHY005","DOIUrl":"https://doi.org/10.1093/JOCLEC/NHY005","url":null,"abstract":"This paper aims to shed light on the economic tools, as well as the legal-economic reasoning, which are used by different European antitrust authorities to assess the allegedly anticompetitive practices of a platform operating in a two-sided market (2SM). First of all, we show that despite the flourishing literature on 2SM economics, antitrust authorities are still facing major challenges when taking decisions concerning two-sided platforms (2SPs). Secondly, we perform a cross-country, comparative study of recent competition proceedings towards the 2SP Booking.com and highlight conceptual and practical divergences among antitrust authorities which are bound by and applying a common European legislation. By concretely and thoroughly showing where the differences lie, our study contributes to identifying the issues to tackle in order to ensure a better harmonized implementation of measures towards 2SPs at the EU level. Finally, building on the results of our work, we propose some alternative approaches which could benefit future antitrust analyses in 2SMs.","PeriodicalId":45547,"journal":{"name":"Journal of Competition Law & Economics","volume":" ","pages":""},"PeriodicalIF":1.5,"publicationDate":"2018-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/JOCLEC/NHY005","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46396431","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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